“¢ The lack of progress in the UK cross-party talks continues to weigh on the GBP.
“¢ A goodish pickup in the US bond yields underpin the USD and add to downtick.
“¢ Investors’ focus remains glued to this week’s other important event/data risks.
The GBP/USD pair dropped to fresh session low in the last hour, with bearish eyeing a sustained break below the 1.2900 handle.
The pair failed to capitalize on its early uptick and in absence of any major breakthrough in the Brexit deadlock, struggled to make it through the 1.2945-50 supply zone. This coupled with a modest US Dollar uptick exerted some additional downward pressure and contributed to the pair’s intraday slide of around 50-pips.
The intraday USD uptick got an additional boost in wake of the latest leg of an upsurge in the US Treasury bond yields following the release of surprisingly stronger spending data, which largely offset weaker personal income and softer inflation figures – core PCE price index (in sync with Friday’s GDP report).
It would now be interesting to see if the pair is able to find any buying interest at lower levels or the current slide marks the resumption of the recent well-established bearish trend as the focus now shifts to this week’s key event/data risks – including the latest monetary policy updates by the BoE and the Fed.
Apart from this, a slew of important macro releases from the UK and the US, scheduled at the beginning of a new month, might further collaborate towards infusing some volatility and help investors determine the pair’s next leg of a directional move.
Technical levels to watch
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